Locally increased supply of resort real estate

In a recent market report, the Vietnam Association of Realtors (VARS) said that the supply of resort real estate is starting to increase again. In the second quarter, 7 projects were opened for sale, providing nearly 2,800 new products, 8 times more than the previous quarter.

The number of projects licensed for construction or groundbreaking also improved in the past quarter. For example, in Phu Yen, a 57-hectare project managed by Mandarin Oriental Hotel Group was granted a construction permit in mid-June. The project is located in Bai Nom, providing more than 70 villas. Or in Phu Quoc, a project of more than 1 hectare located in Bai Truong broke ground more than a month ago. This project includes 81 low-rise apartments, with an expected price of 4.8 billion VND per apartment.

Data from Batdongsan shows that interest in various types of resort real estate is improving. For example, interest in condotels reached more than 20 points in the second quarter, four times higher than in the first quarter, while interest in beach villas also increased from 80 points at the end of last year to 100 points in the second quarter.

However, VARS assessed that this was only a local increase because most of the supply was concentrated in a few localities. In the first 6 months of the year, the market had more than 3,100 newly opened units, double the number in the first half of last year, but only 27% compared to the same period in 2022.

Similarly, data from DKRA Group, a real estate services company, shows that primary condotel supply increased by 51% year-on-year, but mainly in Nha Trang (Khanh Hoa). Other localities such as Quang Nam, Binh Dinh, Binh Thuan and Vung Tau account for 5-12% of primary supply.

Regarding transactions, DKRA said the number of products sold increased nearly 7 times compared to the same period, but locally in one project. Meanwhile, most old projects are still selling slowly or closing their inventory. Market liquidity is mainly resort villas under 10 billion VND per unit and condotels under 3 billion.

Mr. Vo Hong Thang, Director of Consulting and Project Development Services, DKRA Group, said that the primary price level is still high and has little fluctuation compared to the same period last year. The highest condotel price is up to 140-180 million VND per square meter. Cash flow support policies such as extending payment schedules, principal grace period, interest rate support... are still applied by investors to stimulate demand.

From the investor's perspective, Mr. Michael Piro, General Director of Indochina Capital, said that the resort real estate segment attracts less foreign capital than industrial or residential real estate. Because instead of researching a potential piece of land and building a resort, they often choose to enter the market by "buying projects developed by domestic enterprises but ineffectively managed". From there, foreign investors can directly participate in management and improve the quality of the project.

Forecasting future supply, Mr. Vo Hong Thang said that in the third quarter, there will be about 400-500 condotel products introduced to the market, concentrated in Da Nang, Khanh Hoa and Quang Ninh. Meanwhile, there will be about 100-150 resort villas, equivalent to the second quarter. Experts predict that the price level will remain high and will not fluctuate much.

In the long term, Mr. Michael Piro assessed that the resort real estate market still has potential for development, although the recovery is slower than other segments, because Vietnam's tourism industry is returning to the race. The expert cited that in the first 6 months of the year, Vietnam welcomed more than 8.8 million international visitors, an increase of more than 58% over the same period last year and higher than the 8.5 million in 2019 - the time before the Covid-19 pandemic.